Cokal (ASX:CKA) has entered into a binding term sheet with local coal company PT Petrindo Jaya Kreasi to share facilities and to further develop the haul road at the Bumi Barito Mineral Project in the Central Kalimantan Province of Indonesia.
Under the terms of the agreement, PT Petrindo will be responsible for funding further development activities as part of improving accessibility at the haul road, commencing onground activities next month.
PT Petrindo will act as the main contractor for road development works, while Cokal, which holds a 60% stake in the project, will offer uninterrupted access to the site until the investment is recouped in toll fees.
Both parties will look to formalise a definitive agreement based on the terms discussed in the term sheet.
CEO Karan Bangur says the company is pleased to have concluded discussions surrounding the term sheet on “highly favourable commercial terms”.
“Under this agreement, we will retain full ownership of the haul road and its associated licenses; while securing the right to recoup all the investments we have made to date,” Bangur says.
“Furthermore, once both parties’ investments in the road are recovered, we will continue to benefit from sustainable income through toll fees.
“This milestone not only strengthens our financial position but also marks a significant step in deepening our partnership with Petrindo, as we work jointly with them to further upgrade and expand critical infrastructure—an initiative that was originally spearheaded by Cokal.”
Toll fees will be collected after reaching a combined transportation capacity of 2 million tonnes, otherwise on 1 July 2026, depending on what comes first.
Cokal is pushing towards becoming a metallurgical coal producer with four projects in the Central Kalimantan Province of Indonesia.
Write to Maddison Elliott at Mining.com.au
Images: Cokal
